LLY Stock Predicted to Rise by 50% According to Eli Lilly
In a surprising turn of events, Eli Lilly's stock (LLY) experienced a drastic 14% decline on August 7, 2025, despite the company announcing strong quarterly earnings, revenues, and raised guidance. The culprit? The late-stage clinical trial results for Orforglipron, Eli Lilly's daily oral weight-loss pill.
The trial showed that patients lost nearly 12% of their body weight, falling short of analysts' expectations of about 15%. This disappointing result, despite the overall strong company financials, cast a shadow over Eli Lilly's performance and led to investor disappointment.
The market's reaction favored Eli Lilly’s competitor, Novo Nordisk, whose oral weight-loss pill is perceived as more effective. This intensified competition concerns and put pressure on Eli Lilly’s stock. Despite strong Q2 performance fueled by blockbuster drugs like Mounjaro and Zepbound, which continue driving revenue growth, the focus on Orforglipron’s efficacy dominated the trading sentiment.
Trading volume spiked significantly, showing intense investor repositioning and selling pressure in response to the Orforglipron news. However, subsequent analysis and positive developments in other areas of the business have led some analysts to consider the sell-off an excessive reaction.
The setback in Eli Lilly’s oral weight-loss drug trial overshadowed the company's robust earnings and growth. Analysis suggests that LLY stock represents a buying opportunity despite the recent drop. The Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark to generate solid returns for investors, supports this view.
Eli Lilly's balance sheet appears robust, with a very low Debt-to-Equity Ratio of 6.8% and cash accounts for 3.5% of Total Assets. The company's performance across essential financial metrics is summarized as: Growth - Very Strong, Profitability - Strong, Financial Stability - Strong, Downturn Resilience - Strong, Overall - Strong.
In the last three years, Eli Lilly's average annual sales growth has exceeded 20%, with an impressive 38% growth noted in the latest quarter. The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks offers a responsive strategy to capitalize on favorable market conditions while minimizing losses during market downturns.
Analysts' average price projection for Eli Lilly is $945, suggesting a nearly 50% upside for the company. Despite the current stock valuation appearing expensive compared to the broader market, with a P/S ratio of 13 and a P/E ratio of 42, the potential for growth and the company's strong financials make it an attractive investment opportunity for many.
However, the market anticipates the company with the more effective drug will control the oral weight-loss sector. The stock price of Novo Nordisk, a competitor working on an oral weight-loss pill, increased due to the news. It remains to be seen how Eli Lilly will navigate this competitive landscape and whether Orforglipron will regain its potential in future trials.
[1] Source: Yahoo Finance [2] Source: MarketWatch [3] Source: Fool.com [4] Source: Seeking Alpha [5] Source: The Motley Fool
- Investors' suspicions about Eli Lilly's potential in the oral weight-loss sector grew after the disappointing results of the Orforglipron trial, causing a 14% decline in LLY stock. However, analysts suggest that the recent drop in LLY stock might be an excessive reaction, considering the company's strong financial performance and growth.
- Novo Nordisk's stock saw an increase following the news about Eli Lilly's Orforglipron trial, as the market favors the competitor's oral weight-loss pill due to perceived effectiveness. The competitive landscape in the sector remains uncertain, as it depends on how Eli Lilly will navigate the trials and regain potential with Orforglipron.
